All four banks to stay private after Piraeus wraps up book-building

All four banks to stay private after Piraeus wraps up book-building

All four of the country’s systemic banks have now successfully ended the process of their share capital increases after Piraeus Bank closed its book on Friday. As a result they will remain in private hands, away from the grip of the Hellenic Financial Stability Fund (HFSF).

Sources say that Piraeus Bank has amassed offers from investors totaling 1.34 billion euros, exceeding its original target. The share price has been set at 0.003 euros, amounting to an 86 percent discount from the stock’s closing on Thursday at 0.021 euros. This is also 99.8 percent lower than the share price at the previous capital increase in spring 2014, at 1.70 euros.

Piraeus will also draw 3.3 billion euros from the HFSF, a quarter of which will be covered by common shares and the rest with contingent convertible bonds (CoCos), so as to cover the needs stemming from the stress test’s adverse scenario.

Earlier in the week the other three main lenders announced the completion of their capital increases. Late on Thursday National Bank announced it had collected offers of 1.6 billion euros at a share price of 0.02 euros, which constitutes a 93 percent discount on the stock price and a 99 percent drop from the previous share capital increase when its shares cost 2.20 euros apiece.

Next week National will sell shares to Greek investors at the same price as that given to foreign investors. With the increase, National has covered the requirements of the baseline scenario, and it will draw another 3 billion euros from the HFSF for the needs from the adverse scenario.

Alpha also announced it has fielded offers of 2.7 billion euros and Eurobank said it has collected bids of 2.5 billion euros.

The state’s holdings in the four banks are dramatically reduced: In Eurobank the HFSF will command just 2.3 percent, in Piraeus it will own 25 percent and in Alpha it will hold 11 percent of shares.

It is only in National Bank that the HFSF will retain a larger stake, as the bank’s preferred shares will be transformed into common shares and it is not possible to calculate the state’s holding with precision.

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